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City leaders discuss reducing budget deficit

February 04, 2002

City leaders discuss reducing budget deficit



By ANDREA BROWN-HURLEY
andreabh@herald-mail.com


The Hagerstown mayor and City Council members met with city finance officials Friday to discuss options for whittling down the $1.2 million general fund deficit projected for the next fiscal year, which begins July 1.

Finding new income sources, raising property taxes, cutting staff and/or employee compensation packages are some ways to reduce the deficit, City Administrator Bruce Zimmerman said Friday.

The city's main operating fund, the general fund pays for departments such as police, fire and public works. It is the only city fund that receives money from property taxes.

The general fund will have an estimated $24.6 million in revenues, which includes almost $13.7 million in property taxes, according to revised projections.

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General fund expenses are expected to be about $25.8 million in the coming fiscal year.

One of the main reasons for the deficit is that wages and benefits are expected to increase by about 6.7 percent next fiscal year, but corresponding revenues - including property taxes and income the city shares with the county and state - are only expected to increase by 3.7 percent, Zimmerman said.

The elimination of raises and/or cost of living increases to reduce the anticipated deficit were among the options discussed Friday.

The city saved about $287,000 this year by eliminating employees' annual cost of living increases, Zimmerman said.

According to projections for the next fiscal year, the city could save about $393,000 if the 2.5 percent cost of living increases are cut, City Finance Director Al Martin said Friday.

Eliminating raises, or "step increases," was also discussed Friday. Union contracts make that cut unlikely, Martin said.

The entire $1.2 million projected deficit could be offset with a 9.1 percent tax increase, Martin said. The mayor and council didn't further discuss the possibility of a property tax increase.

Mayor William M. Breichner and Councilman Lewis C. Metzner have said a tax increase - but not how much of one - probably will be needed to balance the budget.

Also, Metzner said, the city should see if the federal government will help pay for two new firefighters.

Councilman Kristin Aleshire suggested increasing such development-related fees as building permit costs. Such a move might shave about $100,000 from the projected deficit, Zimmerman said.

Money collected from speeding tickets in Hagerstown could also benefit the city's coffers if council members made speeding in city limits a municipal infraction rather than a state offense, Breichner said. The state now collects money from speeding tickets issued by Hagerstown police officers.

"I think we should look into that," Breichner said. "The state is not going to give us anything and our guys do the work."

The city could bring in more property taxes by aggressively marketing Hagerstown as an attractive venue for homeowners, and annexing more surrounding land, Councilman Linn Hendershot and others said.

No decisions were made Friday.

Zimmerman will present a proposed budget to the mayor and council by the end of March. They will then review it, make any changes and adopt a balanced budget for the next fiscal year by the end of May.

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